HOUSING SLOWS. ...

HOUSING SLOWS. For the third month in a row, housing starts -- which is to say, the number of new residences under construction -- dropped . Interestingly, analysts had expected a very slight slowdown this month, predicting a 0.5 percent decline. The real number? 7.4 percent. Meanwhile, builder's confidence dropped from 51 in April to 45 in May -- the lowest number since 1995 -- meaning most builders now see a negative housing market. That�s not terribly good news, but so long as the market cools at a relatively calm pace, we shouldn't see any particularly catastrophic impacts. But watch for those variable rate mortgages -- interest rates are rising, and if they start racing up while the market goes down, the economy is in serious trouble.

About the Author

Ezra Klein is a staff reporter at The Washington Post. You can read his blogging here. His work has appeared in the LA Times, The Guardian, The Washington Monthly, The New Republic, Slate, and The Columbia Journalism Review. He's been a commentator on MSNBC, CNN, NPR, and more.